Altria Group Inc. posted lower quarterly profit on Wednesday, due in part to costs for closing a U.S. cigarette plant as it moves some production to Europe to cut costs and reduce excess capacity.
The company, which saw earnings pressured by its spinoff of Kraft Foods Inc., also cut its full-year earnings forecast to reflect additional charges for asset impairment and other costs.
The parent of Philip Morris USA and Philip Morris International posted second-quarter profit of $2.22 billion, or $1.05 a share, compared with $2.71 billion, or $1.29 a share, a year earlier.
Results include a charge of $318 million related to the planned plant closure.
Excluding one-time items, earnings were $1.15 a share, compared with the consensus analyst estimate of $1.13, according to Reuters Estimates.
Altria said in June that it would close its Cabarrus, North Carolina, cigarette facility by the end of 2010, consolidating U.S. production at its Richmond, Virginia, plant and moving some production for non-U.S. markets to Europe.
Second-quarter total revenue rose 9.7 percent to $18.81 billion.
Excluding excise taxes, revenue was $9.80 billion. On that basis, analysts on average forecast $9.82 billion.
In the quarter, Philip Morris USA shipped 45.6 billion cigarettes, down 3.3 percent from a year earlier.
Philip Morris International shipped 221 billion cigarettes, up 3.3 percent, largely due to an acquisition in Pakistan.
The company is also adding to its international business with an agreement in principle to acquire an additional 30 percent stake in its Mexican tobacco business from its joint venture partner, Grupo Carso, S.A.B. de C.V. for $1.1 billion, bringing Altria's total stake to 80 percent.
Through Tuesday, Altria shares were up 4.5 percent since the company spun off Kraft Foods Inc. at the end of March, compared with a 12.8 percent gain by the Dow Jones Industrial Average, of which it is a component.
(Reporting by Brad Dorfman)